Constitutional Court

KI35/18 Applicant: “Bayerische Versicherungsverbrand”, Constitutional review of Judgment E. Rev. No. 18/2017 of the Supreme Court of Kosovo of 4 December 2017 

KI35/18, Judgment of 11 December 2019, published on 10 January 2020

Keywords: individual referral, legal entity, violation of constitutional rights, Article 31 – Right to Fair and Impartial Trial 

As a result of an accident caused by the INSIG insurer in 2007, the Applicant’s insurer, H.H., suffered material damage. On 12 May 2009, the Applicant filed a claim with the Basic Court. The compensation amount of 10,500 euro in the name of the principal debt was approved by all regular courts. Disputable during the proceedings before the regular courts was the amount of the default interest and the manner of its calculation.

The Basic Court had initially determined the default interest at 20% per year starting on 12 May 2009 until the final payment. The Court of Appeals modified this Judgment by setting the interest “paid by commercial banks on funds deposited in the bank over one year without a specified destination” (i) with an additional penalty (i) of 20% starting from 12 May 2009 (the dale of filing the claim), until 29 July 2011 (entry into force of Law No. 04/L-018 on Compulsory Motor Liability Insurance) whereas (ii) starting from 30 July 2011 until the final payment, only the default interest 12% of the annual interest rate, based on Article 26 of the Law on Compulsory Motor Liability Insurance. Finally, the Supreme Court by Judgment [E. Rev. No. 18/2017] of 4 December 2017, modified the Judgment of lower instance courts regarding the default interest and imposed the obligation to INSIG the default interest “in the amount of savings deposits without term paid by commercial banks in Kosovo without a specific destination over one year (the date on which the expertise was made), and until the final payment.

The Applicant alleged that Judgment [E. Rev. No. 18/2017] of 4 December 2017, of the Supreme Court was rendered in violation of the fundamental rights and freedoms guaranteed by Article 31 of the Constitution in conjunction with Article 6 of the ECHR, due to the lack of reasoning of the court decision, and in breach of the principle of legal certainty, because in his view, the Supreme Court in rendering this Judgment also acted contrary to its case law in at least seven (7) cases which he had submitted to the Court in support of his arguments.

In reviewing the merits of the case, the Court elaborated (i) the case law regarding the right to a reasoned court decision; and (ii) the fundamental principles relating to the consistency of case law and the relevant criteria on the basis of which the European Court of Human Rights assesses whether the lack of consistency, namely the divergence in case law, constitutes a violation of Article 6 of the ECHR, namely, the three basic criteria for determining whether an alleged divergence constitutes a violation of Article 6 of the ECHR, including whether: (a) the divergences in case law are “profound and long-standing”; (b) domestic law establishes mechanisms capable of resolving such divergences; and (c) those mechanisms have been implemented and with what effect.

The Court, applying the abovementioned principles and criteria, held that Judgment [E. Rev. No. 18/2017] of 4 December 2017 of the Supreme Court was rendered in violation of the Applicant’s fundamental rights and freedoms guaranteed by Article 31 of the Constitution in conjunction with Article 6 of the ECHR.

• as to the lack of a reasoned court decision:

The Court held that the Supreme Court in rendering Judgment [E. Rev. No. 18/2017] of 4 December 2017, failed to substantiate the Applicant’s substantive allegations and failed to substantiate its decision as to the amount of the default interest and the time from which the default interest was calculated; and 

• as to the principle of legal certainty in the context of inconsistency of the case law of the Supreme Court:

The Court regarding the application of the legal provisions related to the amount of default interest applicable in cases of compulsory motor liability insurance, applying the three criteria laid down by the European Court of Human Rights found that in the case law of the Supreme Court there are “profound and long-standing differences”, because in at least nine (9) cases, within a period of five (5) years, the Supreme Court applied the legal provisions regarding the amount of the default interest in a divergent manner. Furthermore, the Court emphasized that despite the fact that the mechanisms for ensuring consistency in case law are set out in the relevant laws, this mechanism was not used by the Supreme Court.

Whereas, as regards the application of the legal provisions relating to the moment from which the calculation of the default interest begins, the Court found that the departure of the Supreme Court from the case law in this respect is an isolated case and which cannot pass the test laid down by the European Court of Human Rights to find “profound and long-standing differences” in the relevant case law.